Source: Coca-Cola

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Coca-Cola Europacific Partners has posted annual constant currency growth of 8% despite a dip in overall sales volumes.

The UK Coke bottler said full-year reported revenues were up 5.5% to €18.3bn last year, which represented growth of 8% on a fx-neutral basis.

The group said it delivered more revenue growth for its retail customers than any of its fmcg peers in Europe or non-alcoholic drinks peers in Australia & New Zealand.

It posted non-alcoholic value share gains across channels both in-store (+10bps) and online (+90bps), while increasing household penetration in Europe (+70bps).

However, overall comparable volumes fell back 0.5% overall.

Volumes were up 0.5% in Europe, reflecting solid in-market execution, though resilient consumer demand was offset by mixed summer weather.

In its Asia Pacific region volumes fell by 5% despite solid in-market execution driving continued volume growth in Australia & NZ, as it was offset by softer consumer spending in Indonesia and strategic SKU portfolio rationalisation.

Overall growth was driven by pricing, with revenue per case up 8.5% (8% in Europe and 11% in Australia, Pacific & Indonesia (API)) driven by headline price increasing, promotional optimisation and favourable mix.

By channel, away from home fell back 1.5% and in-home was flat.

In the fourth quarter, reported sales were up 5% with fx-neutral sales up 7%.

The group returned to volume growth in the quarter, with sales volumes up 1%.

For the full year, comparable operating profit was up 13.5% to €2.4bn, reflecting strong top-line growth and the effects of its efficiency programmes and efforts on discretionary spend optimisation.

For 2024 the group expects comparable revenue growth of around 4%, with more balance between volumes and price/mix than in 2023.

It forecasts operating profit comparable growth with be around 7%, in line with mid-term strategic objectives.

CEO Damian Gammell commented: “2023 was a great year for CCEP. This is testament to the hard work of our colleagues to whom we are extremely grateful, alongside our customers and brand partners. Our focus on leading brands, strong customer relationships and solid in-market execution served us well.

“We delivered solid top and bottom-line growth and generated impressive free cashflow. We drove solid gains in revenue per unit case through our revenue and margin growth management, along with our price and promotion strategy across a broad pack offering. Across our developed markets, transactions outpaced volume and we grew both share and household penetration.

“We are well placed for FY24 and beyond. We are stronger and better, more diverse and robust, and our categories remain resilient despite ongoing macroeconomic and geopolitical volatility. We have fantastic activation plans, focusing on the Paris Olympics and the UEFA Euros, to engage customers and consumers. And we continue to actively manage our pricing and promotional spend to remain relevant to our consumers, balancing affordability and premiumisation. Along with our focus on productivity, this will all ultimately drive our free cashflow.”

Meanwhile, the group has announced the completion of its acquisition, with Aboitiz, of Coca-Cola Beverages Philippines from the Coca-Cola Company.

The deal sees a 60:40 ownership structure between CCEP and AEV, and values CCBPI at $1.8bn on a debt-free, cash-free basis.

The acquisition builds on CCEP’s successful expansion into API in 2021, further strengthens its partnership with Coca-Cola and supports its long-term growth strategy and focus on driving shareholder value.

The transaction has been funded through existing liquidity and incremental borrowing and will have a modest impact on CCEP’s leverage.

CCEP shares in Europe have fallen 0.8% to €62.50 this morning.

Morning update

UK consumer confidence fell back in February amid confirmation the country fell into recession in the final quarter of last year.

GfK’s long-running Consumer Confidence Index fell two points to –21 in February.

The index measuring changes in personal finances during the last year is down two points at –14, which remains 12 points better than February 2023. The forecast for personal finances over the next 12 months was unchanged.

The measure for the general economic situation of the country during the last 12 months is down two points at –43 – still 22 points higher than in February 2023.

Expectations for the general economic situation over the next 12 months dropped by three points to –24, which is now 19 points better than February 2023.

Joe Staton, client strategy director at GfK, said: “There’s a mixture of bad news and good news for February. The bad news is that the improvement in the Overall Index Score seen over recent months stalled slightly in February due to a fall across most measures. However, the good news is that optimism for our personal financial situation for the next 12 months has not slipped back. Although registering again at zero, this is a significant improvement on the –18 score from February last year.

“This metric is key to understanding the financial mood of the nation, because confident householders are more likely to spend despite the cost of living crisis. Looking forward, it will be interesting to see what the forthcoming budget delivers in terms of taxation and inflation. These are important issues to everyone – especially in an election year.

“The recent performance of the economy will play a crucial role in determining results at the ballot box. All the measures this February are better than a year ago, but consumer confidence alone will not carry us into a brighter economic future.”

On the markets this morning, the FTSE 100 has edged up 0.1% to 7,692pts.

Early risers include Nichols, up 3.7% to 1,035p, Naked Wines, up 2.2% to 67.4p and Bakkavor, up 1.7% to 96.8p.

Fallers include McBride, down 3.4% to 68p, Domino’s Pizza Group, down 3.2% to 355.6p and Just Eat, down 2.5% to 1,252p.

Yesterday in the City

The FTSE 100 was up 0.3% yesterday to 7,684.4pts.

In Switzerland, Nestlé slumped 4.9% back to €94.24 after its annual sales failed to meet expectations, falling to its lowest share price level for four years.

Danone fared better after posting its own annual results, with its shares edging down 0.1% to €61.64.

In the UK risers included PayPoint, up 3.1% to 510p on the signing of a Collect+ agreement with Royal Mail, Glanbia, up 2.5% to €15.79, Hilton Food Group, up 1.9% to 796p, Just Eat, up 1.8% to 1,284p and Nichols, up 1.7% to 998.5p.

Fallers included Naked Wines, down 5.9% to 66p, Domino’s Pizza Group, down 3.2% to 367.2p, Tesco, down 3.1% to 276.8p, PZ Cussons, down 2.5% to 100.4p, Greencore, down 2.3% to 102.2p and Sainsbury’s, down 2% to 254.1p.